menu
bartleby
search
close search
Hit Return to see all results
close solutoin list

Sales-related transactions using perpetual inventory system The following selected transactions were completed by Green Lawn Supplies Co., which sells irrigation supplies primarily to other businesses and occasionally to retail customers: Instructions Journalize the entries to record the transactions of Green Lawn Supplies Co.

BuyFindarrow_forward

Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663

Solutions

Chapter
Section
BuyFindarrow_forward

Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663
Chapter 5, Problem 2PA
Textbook Problem
225 views

Sales-related transactions using perpetual inventory system

The following selected transactions were completed by Green Lawn Supplies Co., which sells irrigation supplies primarily to other businesses and occasionally to retail customers:

Chapter 5, Problem 2PA, Sales-related transactions using perpetual inventory system The following selected transactions were

Instructions

Journalize the entries to record the transactions of Green Lawn Supplies Co.

To determine

Sales is an activity of selling the  inventory of a business.

To Record: The sale transactions of the company.

Explanation of Solution

Record the journal entry for the sale of inventory on account.

DateAccounts and ExplanationDebit ($)Credit ($)
March 2Accounts receivable18,711 (1) 
               Sales Revenue 18,711
 (To record the sale of inventory on account)  

Table (1)

Working Note:

Calculate the amount of accounts receivable.

Sales = $18,900

Discount percentage = 1%

  Amount of accounts receivable} = (SalesDiscount)=Sales(Sales×1%)= $18,900 – ($18,900×1%)= $18,900$189=$18,711 (1)

  • Accounts Receivable is an asset and it is increased by $18,711. Therefore, debit accounts receivable with $18,711.
  • Sales revenue is revenue and it increases the value of equity by $18,711. Therefore, credit sales revenue with $18,711.

Record the journal entry for cost of goods sold.

DateAccounts and ExplanationDebit ($)Credit ($)
March 2Cost of  Sold13,300 
  Inventory 13,300
 (To record the cost of goods sold)  

Table (2)

  • Cost of  sold is an expense account and it decreases the value of equity by $13,300. Therefore, debit cost of  sold account with $13,300.
  • Inventory is an asset and it is decreased by $13,300. Therefore, credit inventory account with $13,300.

Record the journal entry for the sale of inventory for cash.

DateAccounts and ExplanationDebit ($)Credit ($)
March 3Cash12,031 (3) 
 Sales Revenue 11,350
 Sales Tax Payable 681 (2)
 (To record the sale of inventory for cash)  

Table (3)

Working Notes:

Calculate the amount of sales tax payable.

Sales revenue = $11,350

Sales tax percentage = 6%

  Sales tax payable = (Sales×Sales tax percentage)=(Sales×6%)($11,350×6%)= $681

   (2)

Calculate the amount of cash received.

Sales revenue = $11,350

Sales tax payable = $681 (2)

  Cash received = (Sales+Sales tax payable)=$11,350+$681= $12,031

   (3)

  • Cash is an asset and it is increased by $12,031. Therefore, debit cash account with $12,031.
  • Sales revenue is revenue and it increases the value of equity by $11,350. Therefore, credit sales revenue with $11,350.
  • Sales tax payable is a liability and it is increased by $681. Therefore, credit sales tax payable account with $681.

Record the journal entry for cost of goods sold.

DateAccounts and ExplanationDebit ($)Credit ($)
March 3Cost of  Sold7,000 
  Inventory 7,000
 (To record the cost of goods sold)  

Table (4)

  • Cost of  sold is an expense account and it decreases the value of equity by $7,000. Therefore, debit cost of  sold account with $7,000.
  • Inventory is an asset and it is decreased by $7,000. Therefore, credit inventory account with $7,000.

Record the journal entry for the sale of inventory on account.

DateAccounts and ExplanationDebit ($)Credit ($)
March 4Accounts receivable55,400 
               Sales Revenue 55,400
 (To record the sale of inventory on account)  

Table (5)

  • Accounts Receivable is an asset and it is increased by $55,400. Therefore, debit accounts receivable with $55,400.
  • Sales revenue is revenue and it increases the value of equity by $55,400. Therefore, credit sales revenue with $55,400.

Record the journal entry for cost of goods sold.

DateAccounts and ExplanationDebit ($)Credit ($)
March 4Cost of  Sold33,200 
  Inventory 33,200
 (To record the cost of goods sold)  

Table (6)

  • Cost of  sold is an expense account and it decreases the value of equity by $33,200. Therefore, debit cost of  sold account with $33,200.
  • Inventory is an asset and it is decreased by $33,200. Therefore, credit inventory account with $33,200.

Record the journal entry for the sale of inventory for cash.

DateAccounts and ExplanationDebit ($)Credit ($)
March 5Cash31,800 (5) 
 Sales Revenue 30,000
 Sales Tax Payable 1,800 (4)
 (To record the sale of inventory for cash)  

Table (7)

Working Notes:

Calculate the amount of sales tax payable.

Sales revenue = $30,000

Sales tax percentage = 6%

  Sales tax payable = (Sales×Sales tax percentage)=(Sales×6%)($30,000×6%)= $1,800

   (4)

Calculate the amount of cash received.

Sales revenue = $30,000

Sales tax payable = $1,800 (2)

  Cash received = (Sales+Sales tax payable)=$30,000+$1,800= $31,800

   (5)

  • Cash is an asset and it is increased by $31,800. Therefore, debit cash account with $31,800.
  • Sales revenue is revenue and it increases the value of equity by $30,000. Therefore, credit sales revenue with $30,000.
  • Sales tax payable is a liability and it is increased by $1,800. Therefore, credit sales tax payable account with $1,800.

Record the journal entry for cost of goods sold.

DateAccounts and ExplanationDebit ($)Credit ($)
March 5Cost of  Sold19,400 
  Inventory 19,400
 (To record the cost of goods sold)  

Table (8)

  • Cost of  sold is an expense account and it decreases the value of equity by $19,400. Therefore, debit cost of  sold account with $19,400.
  • Inventory is an asset and it is decreased by $19,400. Therefore, credit inventory account with $19,400.

Record the journal entry for the cash receipt against accounts receivable.

DateAccounts and ExplanationDebit ($)Credit ($)
March 12Cash18,711 
 Accounts Receivable 18,711
 (To record the receipt of cash against accounts receivables)  

Table (9)

  • Cash is an asset and it is increased by $18,711. Therefore, debit cash account with $18,711.
  • Accounts Receivable is an asset and it is increased by $18,711. Therefore, debit accounts receivable with $18,711.

Record the journal entry for the sale of inventory for cash.

DateAccounts and ExplanationDebit ($)Credit ($)
March 14Cash13,700 
 Sales Revenue 13,700
 (To record the sale of inventory for cash)  

Table (10)

  • Cash is an asset and it is increased by $13,700. Therefore, debit cash account with $13,700.
  • Sales revenue is revenue and it increases the value of equity by $13,700. Therefore, credit sales revenue with $13,700.

Record the journal entry for cost of goods sold.

DateAccounts and ExplanationDebit ($)Credit ($)
March 14Cost of  Sold8,350 
  Inventory 8,350
 (To record the cost of goods sold)  

Table (11)

  • Cost of  sold is an expense account and it decreases the value of equity by $8,350. Therefore, debit cost of  sold account with $8,350.
  • Inventory is an asset and it is decreased by $8,350. Therefore, credit inventory account with $8,350.

Record the journal entry for the sale of inventory on account.

DateAccounts and ExplanationDebit ($)Credit ($)
March 16Accounts receivable27,225 (6) 
               Sales Revenue 27,225
 (To record the sale of inventory on account)  

Table (12)

Working Note:

Calculate the amount of accounts receivable.

Sales = $27,500

Discount percentage = 1%

  Amount of accounts receivable} = (SalesDiscount)=Sales(Sales×1%)= $27,500 – ($27,500×1%)= $27,500$275=$27,225 (6)

  • Accounts Receivable is an asset and it is increased by $27,225

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Chapter 5 Solutions

Financial And Managerial Accounting
Show all chapter solutions
add
Ch. 5 - Gross profit During the current year, merchandise...Ch. 5 - Purchases transactions Elkhorn Company purchased...Ch. 5 - Sales transactions Journalize the following...Ch. 5 - Freight terms Determine the amount to be paid in...Ch. 5 - Transactions for buyer and seller Shore Co. sold...Ch. 5 - Adjusting entries Hahn Flooring Company uses a...Ch. 5 - Asset turnover ratio Financial statement data for...Ch. 5 - Determining gross profit During the current year,...Ch. 5 - Determining cost of goods sold For a recent year,...Ch. 5 - Chart of accounts Monet Paints Co. is a newly...Ch. 5 - Purchase-related transactions The Stationery...Ch. 5 - Purchase-related transactions A retailer is...Ch. 5 - Purchase-related transactions The debits and...Ch. 5 - Purchase-related transactions Stylon Co., a womens...Ch. 5 - Purchase-related transactions Journalize entries...Ch. 5 - Sales-related transactions, including the use of...Ch. 5 - Customer refund Senger Company sold merchandise of...Ch. 5 - Customer return and refund On December 28, 20Y3,...Ch. 5 - Sales-related transactions After the amount due on...Ch. 5 - Sales-related transactions The debits and credits...Ch. 5 - Sales-related transactions Sayers Co. sold...Ch. 5 - Determining amounts to be paid on invoices...Ch. 5 - Sales-related transactions Showcase Co., a...Ch. 5 - Purchase-related transactions Based on the data...Ch. 5 - Sales tax A sale of merchandise on account for...Ch. 5 - Sales tax transactions Journalize the entries to...Ch. 5 - Normal balances of accounts for retail business...Ch. 5 - Income statement and accounts for retail business...Ch. 5 - Adjusting entry for inventory shrinkage Omega Tire...Ch. 5 - Adjusting entry for customer refunds, allowances,...Ch. 5 - Adjusting entry for customer refunds, allowances,...Ch. 5 - Income statement for retail business The following...Ch. 5 - Determining amounts for items omitted from income...Ch. 5 - Multiple-step income statement On March 31, 20Y9,...Ch. 5 - Multiple-step income statement The following...Ch. 5 - Single-step income statement Summary operating...Ch. 5 - Closing the accounts of a retail business From the...Ch. 5 - Closing entries; net income Based on the data...Ch. 5 - Closing entries On July 31, the close of the...Ch. 5 - Appendix 1 Gross method for sales discounts...Ch. 5 - Appendix 1 Gross method for sales discounts The...Ch. 5 - Appendix 1 Adjusting entry for gross method The...Ch. 5 - Appendix 1 Discount taken in next fiscal year...Ch. 5 - Appendix 1 Gross and net methods for sales...Ch. 5 - Rules of debit and credit for periodic inventory...Ch. 5 - Journal entries using the periodic inventory...Ch. 5 - Identify items missing in determining cost of...Ch. 5 - Cost of goods sold and related items The following...Ch. 5 - Cost of goods sold Based on the following data,...Ch. 5 - Cost of goods sold Based on the following data,...Ch. 5 - Appendix 2 Cost of goods sold Identify the errors...Ch. 5 - Closing entries using periodic inventory system...Ch. 5 - Purchase-related transactions using perpetual...Ch. 5 - Sales-related transactions using perpetual...Ch. 5 - Sales and purchase-related transactions using...Ch. 5 - A Sales and purchase-related transactions for...Ch. 5 - Multiple-step income statement and balance sheet...Ch. 5 - Single-step income statement and balance sheet...Ch. 5 - Appendix 2 Purchase-related transactions using...Ch. 5 - Sales and purchase-related transactions using...Ch. 5 - Appendix 2 PR 5-9A Sales and purchase-related...Ch. 5 - 2. Net income, 185,000 Appendix 2 PR 5-10A...Ch. 5 - Purchase-related transactions using perpetual...Ch. 5 - Sales-related transactions using perpetual...Ch. 5 - Sales and purchase-related transactions using...Ch. 5 - Sales and purchase-related transactions for seller...Ch. 5 - Multiple-step income statement and balance sheet...Ch. 5 - Single-step income Statement and balance sheet...Ch. 5 - Purchase-related transactions using periodic...Ch. 5 - Sales and purchase-related transactions using...Ch. 5 - Appendix 2 Sales and purchase-related transactions...Ch. 5 - Appendix 2 PR 5-10B Periodic inventory accounts,...Ch. 5 - Palisade Creek Co. is a retail business that uses...Ch. 5 - Analyze and compare Amazon.com and Netflix...Ch. 5 - Analyze Dollar General Dollar General Corporation...Ch. 5 - Compare Dollar Tree and Dollar General The asset...Ch. 5 - Analyze and compare CSX, Union Pacific, and YRC...Ch. 5 - Analyze Home Depot The Home Depot (HD) reported...Ch. 5 - Analyze and compare Kroger and Tiffany The Kroger...Ch. 5 - Analyze J. C. Penney J. C. Penney Company, Inc....Ch. 5 - Ethics in Action Margie Johnson is a staff...Ch. 5 - Purchases discount On April 18, 20Y7, Bontanica...Ch. 5 - Effect of sales discounts Suzi Nomro operates...Ch. 5 - Purchases Discounts and Accounts Payable Rustic...Ch. 5 - Determining the Cost of a Purchase The following...

Additional Business Textbook Solutions

Find more solutions based on key concepts
Show solutions add
What is the purpose of the strategic IT plan?

Accounting Information Systems

Describe the major leadership styles.

Foundations of Business (MindTap Course List)

What is target costing? Describe how costs are reduced so that the target cost can be met.

Managerial Accounting: The Cornerstone of Business Decision-Making

Describe the transactions that are recorded in the following equation:

College Accounting (Book Only): A Career Approach

CAPITAL BUDGETING CRITERIA Your division is considering two projects. Its WACC is 10%, and the projects after-t...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)